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When The S**t Hits The Fan, It’s Nice To Have An Extra $5 Billion Lying Around

And when it does, Paul Singer plans to multiply that money several times over.
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If you haven’t heard, Elliott Management founder Paul Singer’s a bit bearish. Here are some things he’s said about the coming global superpocalypse:


January 2013: The panel… was asked to grade Ben Bernanke. Everyone on the panel gave the Federal Reserve Chairman an “A” or a “B;” Paul Singer gave a “D.”

April 2014: “The Fed has lost any semblance, any whispy remnant of humility, introspection, caution and historical perspective..... If you open a faucet in the winter and only a trickle comes out, what do you do? Easy! Open it wider. In fact, open ALL the faucets! Brilliant! Now they are all trickling. But when the pipe blockage comes unstuck or the ice melts, you will have a flood.”

November 2014: “The incompetent global response to the Ebola epidemic may be a precursor to a severe economic slump. The impact of Ebola on the global economy and financial markets is extremely hard to predict, with the possibilities ranging from mildly disruptive and growth suppressive on one had to catastrophic on the other.”

December 2014: “The Federal Reserve Board could say to the fiscal authorities, Chairman Yellen could say, ‘We’ve done enough. It’s up to the president and Congress to generate the policies to unleash the growth potential that this country, that country, are capable of….’ The Fed loves its role as the Atlas holding up the world.”

May 2016: “Investors have increasingly started processing the fact that the world’s central bankers are completely focused on debasing their currencies.”

August 2016: “Everyone is in the dark. Experience doesn’t count for much, and extreme confidence may be fatal…. The ultimate breakdown (or series of breakdowns) from this environment is likely to be surprising, sudden, intense and large.”

May 2017: “There has never been a larger (and more undeserved) spirit of financial market complacency in our experience…. financial market meltdown….”

July 2016: “I think if [Donald Trump] actually stuck to those policies and gets elected president, it’s close to a guarantee of a global depression, widespread global depression.”

Well, Donald Trump did get elected president, and Paul Singer has made his peace with it—and raised an extra $5 billion, to boot. Does that mean he thinks everything’s hunky dory and we’ve nothing to fear? Not exactly. Allow him to explain why he thinks the extra money will come in handy when everything comes crashing down.

"Given groupthink and the determination of policymakers to do 'whatever it takes' to prevent the next market 'crash,' we think that the low-volatility levitation magic act of stocks and bonds will exist until the disenchanting moment when it does not. And then all hell will break loose (don't ask us what hell looks like...), a lamentable scenario that will nevertheless present opportunities that are likely to be both extraordinary and ephemeral. The only way to take advantage of those opportunities is to have ready access to capital….”

In 2008, the hedge fund said, it invested all of the remaining capital investors had committed to it shortly after Lehman Brothers failed, and also raised an additional $800 million. The hedge fund said it "could have deployed ten times as much in what turned out to be amazing (and fleeting) opportunities."

A legendary hedge fund that raised $5 billion in 24 hours expects ‘all hell to break loose’ [BI]



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